This week gold prices continue to rise, even after suffering a temporary decline at the beginning of the week. There is a chance that gold prices will continue its seventh consecutive weekly gain and will add another week. It means that gold prices continue to attract investors from around the world. There are several reasons why the price of spot gold is increasing for such a long period of time. In this article, we will talk about the main developments which affected the gold prices during this week.
The gold prices rose on Friday, and it reached $1,418 per ounce. In comparison with the day before the price increased by 0.2% and so far this week’s overall gain is 0.7%. The spot price of gold is growing ahead of the U.S. non-farm payrolls (NFP) report, which is due later today. Non-farm payroll is important to access the overall situation in the U.S economy. It includes information regarding the number of jobs added during the previous months. This report might affect the gold prices because if these figures are not as high as expected, this will help the gold prices to strengthen its position.
NFP report and the gold prices
Economists expect that the number of jobs added by the U.S. companies will increase by 160,000 in June. According to the last month’s employment data total nonfarm payroll employment figure increased only by 75,000. On average in one month 164,000 jobs are created in 2019, which is worse than in 2018 when the economy added 223,000 jobs per month. In the case of another disappointing month, there is a chance gold prices will continue to rise during the upcoming days.
Another reason why the NFP report is an important tool to look at when talking about the gold prices is that the Federal Reserve takes into consideration when it comes to its policies regarding the interest rate. The next meeting of the board of governors will take place at the end of July, and the result of the NFP report will play a significant role in whether the interest rate will remain the same until the next meeting.
The NFP report is not the only factor when it comes to determining the price of spot gold. The tensions in the Persian Gulf between the U.S. and Iran is a serious issue. Iran recently broke the limit set by the nuclear deal regarding uranium enrichment. Several weeks before this happened, Iran destroyed the U.S. drone. U.S. President Donald Trump changed his decision as otherwise, the military confrontation would further damage the situation in the region.
Price of gold is increasing
In this situation, the spot price of gold is increasing, and since May the price of this precious metal increased by 12% or $150. According to the technical analyst, Wang Tao from Reuters’ price of spot gold might reach the range of $1,443-$1,456 per ounce of gold.
The gold prices are on the rise, and the NFP report might affect the price of gold. Regional tensions in the Persian Gulf are running high. In this unstable situation, investors are looking for options that give them the possibility to secure their investments. Investing in gold is a smart idea when taking into consideration the current situation.